In most cases, attorney’s end up handling the money from their clients and even advance payments for various court processes among many other legal expenses to be incurred. When the client funds are a small amount or are to be held for a short period to earn client interest, the lawyer is expected to participate in the Interest on Lawyers’ Trust Account (IOLTA) program. Only specific institutions are allowed to have such accounts. On the contrary, if a large amount is held, or money will be held for a long time, then the attorney is expected to use an individual account known as a Client Trust Account (CTA). Here, the interest earned will be awarded to the client. In the current scenario, Ms. Kopitos is under investigation for the accusations of misusing client funds from the CTA in order to pay her mortgage. Although she places the blame on her depression and anxiety, it is important to understand better the right cause of action with regards to her professional misconduct.
Facts
Considering the turn of events, several facts can be identified from the scenario. After Ms. Kopitos represented James Iredell in a personal injury claim, she ensured to file all the necessary paperwork and even prepare a bill for the client. However, before she could mail it to the client, she transferred the money she had received in settlement from the Client Trust Account into the firm’s general account. She then used this amount to pay the mortgage on her home. There is evidence that all paperwork was prepared as claimed since the stamped envelope was found in a pile of stuff on her desk where it had been forgotten for two weeks. Ms. Kopitos accepts her mistake and mentions that it could have been caused by her depression and anxiety, which was still undiagnosed at this time. This fact makes it impossible to believe that she even had the intention of informing the client since there is no way for her to prove her medical condition.
In relation to the current client, Arleigh Burke, it is clear that the matter is yet to be resolved. An advanced fee of $5,000 was paid to Ms. Kopitos on February. Immediately after, she decided to transfer $1,900 into the firm’s general account, which she also used to pay her mortgage. It is important to note that this action was taken even before she could perform any additional work on the client’s file. The following month, a repeat of the same is noted, even though the case had not yet been closed. It is evident that Ms. Kopitos has been using these funds to cater to a lot of her personal needs such as paying bills and even tuition fees. At the time of the audit, this amount had not yet been paid. However, after some time, Ms. Kopitos managed to pay it back with the help of her mother in law who is expected to move in with her after selling her own house. She is also expected to assist Ms. Kopitos with her financial situation.
Another important fact to take note of in this second scenario is that Ms. Kopitos was not willing to be open about it. She only did so after being confronted about the inconsistencies in her trust account ledgers. She also blamed the situation on her depression and anxiety just like the first case. Her previous professional record is impressive and free from any kind of misconduct. For this reason, many individuals are willing to testify on her behalf.
Issues
When analyzing the current situation, it is evident that several major issues are at play. It is evident that Ms. Kopitos failed to follow rules as required before transferring funds to the company’s general account. The Paralegal Rules of Conduct (Paralegal Rules) states that neither the lawyers nor paralegals have authority to appropriate funds of the client that have been held in trust, or those that are in control of the lawyer or paralegal, for fees except as permitted under the Law Society Act. There are various requirements which should be followed when withdrawing funds from the trust. If the client instructs or gives consent, then the disbursement can be paid directly from the client trust account (Attorney Grievance Commission Of Maryland v. John Wheeler Glenn, 1996). This is because it represents the expenses that the client has incurred. However, a paralegal may only pay his or her fees from the trust account only if the legal services for which the client is being charged has been completed, if the statement of account has been forwarded to the client, and if there are sufficient funds in the client trust account to cater for the payment (Attorney Grievance Commission v. Charles J. Zuckerman, 2005).
In the scenario above, Ms. Kopitos had already completed the services for James but did not send the statement of account. This is what creates an issue as she did not get the consent to pay herself for the services from the client. On the other hand, considering the case of Arleigh, she paid herself without receiving consent, and also before completing the services required. She started withdrawing funds on the next day even before she could do anything in return (The Florida Bar v. Ellis S. Simring, 1993). When progress has been made, but services have not been completed, an interim bill should have been presented to the client so that payments for services done so far can be disbursed. Unfortunately, this procedure was not followed. Therefore, the right order for disbursing payments was not followed, which is why professional misconduct in the form of client fund misappropriation is implied.
Law
There are specific laws which may govern the professional conduct of paralegals in relation to client trust account funds and use. A client’s money retainer may not be deposited into the firm’s general account as this is money being held for future use and not or payment of services rendered (Pedersen, Nicholson & Marcoux, 2017). It should only be disbursed when specific payments relating to the legal proceedings are being made. Ms. Kopitos transferred the retainer money from the client trust accounts into the firm’s general account despite this money not being set aside for payment of legal service. Hence, there is a misappropriation of funds as the attorney has been using money set aside for a specific purpose, to fulfill her personal needs (Attorney Grievance Commission Of Maryland v. John Wheeler Glenn, 1996). There are also rules set aside to guide when disbursing money from the trust accounts. The law is specific on the three requirements which must be fulfilled before an attorney can transfer funds from the client trust account.
In such cases, when misappropriation occurs, there Law Society disciplines the paralegal who is involved in the scandal or professional misconduct (The Florida Bar v. Ellis S. Simring, 1993). Before any measures can be taken, it is necessary to first prove that unethical conduct has taken place. In this case, Ms. Kopitos has accepted her faults and even pleaded guilty. Therefore, there is proof that professional misconduct has been witnessed (Pedersen, Nicholson & Marcoux, 2017). However, since this is the first scenes that misconduct has been noted, Ms. Kopitos may end up receiving a less severe sentence. Also, since she has already been diagnosed with depression and anxiety, she may be expected to seek medical help before resuming practice.
It is likely that Ms. Kopitos will be charged with professional misconduct as there was proof of her using money from client trust accounts to satisfy her personal needs. However, since she has also been diagnosed with a medical condition that would be triggering her actions, she may have her license suspended for one or two years so that she can be allowed to seek medical help and recover. However, the sentence is less severe due to the fact that she has managed to refund what she took from the client trust accounts. If this was not possible, then a heavier sentence would have been incurred as that would amount to theft. Although she us suffering from depression and anxiety, there is no excuse to break the law and go against the expected professional conduct of paralegals. She should have sought financial help elsewhere by obtaining loans from banks or seeking assistance from friends and family. This is why she still gets to be punished to ensure that a repeat of the same is avoided in the future.
Conclusion
It is clear that the law does not allow misconduct just because one is depressed. All professionals are expected to maintain a high standard when operating and offering legal services to clients. Anyone who goes against the rules of conduct and those stipulated by the Law Society will have to be answered and disciplined appropriately. The same has been witnessed by Ms. Kopitos who is suffering from depression and anxiety. She will still get punished for not seeking the right channel for assistance, and instead opting to break the law in relation to the use of client trust accounts.
References
Attorney Griev. Comm. v. Glenn, 671 A. 2d 463 – Md: Court of Appeals 1996
Attorney Grievance Comm. v. Zuckerman, 872 A. 2d 693 – Md: Court of Appeals 2005
Pedersen, K., Nicholson, K., & Marcoux, J. (2017). Lawyers misappropriated millions from clients’ funds but few faced criminal charges. CBC News. Retrieved from https://www.cbc.ca/news/canada/lawyers-misappropriated-millions-1.3981266
The Florida Bar, Complainant, v. Ellis S. Simring, Respondent. Nos. 77351, 78243, 78898 and 79510. Jan. 21, 1993.
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